One thing I would like to add: there are tons of free apps that I wouldn't even bother to download and test. I have about 15 games on my Nexus - some from play store, some from indie bundle, but I play maybe 5 of them. It's not just free alternatives - you have to compete for very scarce user attention.
Since Soviet times propaganda we have figure of speech "But you hang negroes". It was popular in to answer on foreign critique of Soviet Union in papers like Pravda with accusations of US hypocrisy and double standards.
The sad thing is, exactly the same rhetoric are used now in case of Wikileaks.
We don't have DMCA-style safe harbor provisions in Russia.
But we do have landmark ruling, explaining when service provider are liable for users infringement. In this case Vkontakte wasn't found liable for infringement af a matter of fact. But they were sanctioned (for around $6500. Not much huh.) because social network wasn't fast enough after reported infringement. Actually they simply blocked search for artist and songs names (laughably easy to bypass) and haven't removed content.
People asked questions about technology on one russian tech forum. Founder dodged most of it when pointed that it won't work. I seriously doubt that they actually have technology. Whole thing looks like scam for stupid rightholders
When Google was celebrating 10 идт downloads they dropped prices on certain apps more than ten times (sometimes 20-30 times) - to mere 0.03 cents. The reports from app makers were astonishingly positive - they made more profit. When you have a product with pretty much zero marginal cost - you have a huuge window for price experiments.